REPUBLIC OF TURKEY PRIME MINISTRY

Investment Support and Promotion Agency of Turkey

ISPAT

Electricity Market in Turkey

November 2012
Investment Support and
Promotion Agency of Turkey

Turkish Electricity Market Growth Potential

6th biggest and one of the fastest growing electricity market in Europe
Rapid increase in the electricity demand
Electricity Demand
(TWh)

210

4.0%

190

198

194

175
161

and significant growth potential

Per capita electricity consumption - 2010
(KWh)
Germany

7,100

OECD
Europe

6,250

Spain

6,200

UK

6,100

128
7.7%

86

57
36
25

Italy
Greece
Turkey

1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010
Source: Privatization Administration of Turkey, MENR

Investment Support and

Promotion Agency of Turkey

5,700
5,400

2,800
X2.5

Turkish Electricity Market Installed Capacity

Breakdown of Installed Capacity
(by fuel type)*

Domestic
coal;
17.1%

Other;
3.8%

Wind;
3.2%

Hydro;
33.0%

Breakdown of Installed Capacity

(by generator type)*

Starting from 1990s, BOT, TOR and BOO

models were adopted and electricity was
sold to government entity through longterm contracts.
Since 2001, these models are not used.
Private investors can sell generated
electricity in market-terms.
Gov't
Contracted
(BOO, BOT,
TOR); 16%

Imported
coal; 6.2%

Autoproducers;
6%

EUAS
(Govt); 46%

Natural
gas;
36.7%

IPP; 32%

Total installed capacity

52 GW
* As of October 2011

Investment Support and

Promotion Agency of Turkey

IPP share increased from 18% to 32% in

10 years

Turkish Electricity Market Framework

Turkish Electricity Market is undergoing liberalization efforts to promote private sector investments

Balancing & Settlement Market (DUY)*

is initiated in August 2006. It is
operated by Turkish Market Financial
Settlement Center (PMUM)**.
DUY is divided into Day Ahead Market
and Balancing Settlement Market.
IPPs can sell electricity by DUY at the
spot market price and/or by bilateral
agreements at the contract price.
Eligibility threshold for a bilateral
agreement is 25 MWh per year
consumption (77% market opening
degree). All consumers will become
eligible in 2015.

Source: Garanti Securities

*DUY: Dengeleme ve Uzlatrma Ynetmelii
**PMUM: Piyasa Mali Uzlatrma Merkezi

Investment Support and

Promotion Agency of Turkey

Turkish Electricity Market Demand and Capacity Forecast

Current total installed capacity is 52 GW. Installed capacity will be doubled by
2023 with 6% CAGR.
Investment requirement on the generation side is estimated to be between
$180 and 210 billion until 2030.
Projections of High-Demand and Low-Demand (TWh) and Installed Capacity (GW)
Demand (TWh)
1000

140 GW

900

125 GW

800

108 GW

100 GW

700

88 GW

600
500

400

120 GW

80 GW

69 GW

60 GW

52 GW

300

40 GW

200
20 GW

100
0

00 GW

2010

2015
High-demand

Source: TEIAS

Investment Support and

Promotion Agency of Turkey

2020
Low-demand

2025
Actual-demand

Installed Capacity

2030

Turkish Electricity Market Capacity Forecast (with Licenses)

Installed capacity is forecasted based on power plants that are under construction and/or
granted by license and expected to be in service on proposed time.
Projections of Installed Capacity based on Conservative Supply Scenario
70.0 GW
60.0 GW
50.0 GW

41%

40.0 GW
30.0 GW

23%
20.0 GW

33%

10.0 GW
00.0 GW
2011

2012

2013

natural gas
Source: TEIAS Capacity Projection Report 2010

Investment Support and

Promotion Agency of Turkey

2014

coal

2015

hydro

2016

wind

2017

other

2018

2019

Turkish Electricity Market Strategy

Strategy
To ensure supply security and increase supply quality
To keep costs and prices at a competitive level to support economical growth
To minimize the negative effects on the environment
2023 Targets
Full utilization of economically and technically feasible hydraulic potential and
indigeneous coal reserves to decrease the share of gas in generation mix
below 30%.
Utilization of renewable energy potential in a cost effective manner and
achieving below targets:

Share of renewables in generation mix will be increased to at least 30%.

Installed wind capacity target is 20,000 MW.
Installed geothermal capacity is 600 MW.
Installed solar capacity target is 3,000 MW.

Introduction of nuclear energy

Investment Support and
Promotion Agency of Turkey

Privatization of Generation Assets Map of Portfolios

Privatization of state generation assets includes 17 thermal and 28 hydro power plants that
are owned by EUAS*. Total installed capacity for the power plants is 16 GW (out of 24 GW).

*EUAS: Elektrik retim A - State Electricity Generation Company

Investment Support and

Promotion Agency of Turkey

Privatization of Generation Assets - Stand-Alone

4 out of 17 thermal power plants (3,211 MW) that are owned by EUAS are planned to be
privatized on a stand-alone basis. This is 28.5% of EUASs total thermal power generation.
Privatization of the stand-alone assets is expected to be completed in 2013.
The Privatization Administrations preference is to privatize the generation assets via share
sale. Coal reserves will be privatized via through TOR (Transfer of Operating Rights)
Agreements.

No

Plant Name

Fuel Type

Location

Age

Installed Capacity

2010 Generation

(MW)

(GWh)

Tender Date

Hamitabat

Natural Gas

Krklareli

26

1,120

5,750

November 2012

Kangal

Lignite

Sivas

20

457

2,313

January 2013

Seyitmer

Lignite

Ktahya

38

600

3,623

December 2012

Soma

Lignite

Manisa

30

1,034

3,897

2013 (expected)

Investment Support and

Promotion Agency of Turkey

Privatization of Generation Assets Portfolios 1 to 4

13 thermal power plants and 28 hydro power plants (13,138 MW) that are owned by EUAS
are planned to be privatized under 9 portfolios.
Privatization timeline is not certain. Tenders are expected after the stand-alone assets are
fully privatized.
Hydro power plants will be privatized through TOR (Transfer of Operating Rights) Agreements.
Portfolio
Plant Name
No

1
2

Fuel Type

Location / River

Age

Installed
Capacity
(MW)

Total
MW

2010
Generation
(GWh)

A. Elbistan A

Lignite

Afin, K.Mara

27

1,355

A. Elbistan B

Lignite

Afin, K.Mara

1,440

Ambarl D.Gaz

Natural gas

Ambarl, stanbul

23

1,351

Ambarl F.Oil

Fuel-oil

Ambarl, stanbul

44

630

Aliaa

Natural Gas

Aliaa, zmir

36

180

251

an

Lignite

an, anakkale

320

2,141

Tunbilek

Lignite

Tunbilek, Ktahya

55

365

1,659

atalaz

Hard Coal

Ikveren, Zonguldak

22

300

Bursa D.gaz

Natural Gas

Ovaaka, Bursa

13

1,432

7,098

Orhaneli

Lignite

Orhaneli, Bursa

19

210

1,174

Gkekaya

Hydro

Sakarya

38

278

505

Saryar

Hydro

Sakarya

55

160

366

Yenice

Hydro

Sakarya

10

38

Investment Support and

Promotion Agency of Turkey

Total
GWh

2,042
2,795

7,694

9,736

7,941
1,981

865

2,118

62

1,883

128

8,003

5,934

9,271

Privatization of Generation Assets Portfolios 5 to 9

Portfolio

No

Plant Name

Altnkaya
Derbent
Hirfanl
Kesikkpr
Kapulukaya
Hasan Uurlu

Hydro

Yeilrmak

32

500

1,722

Suat Uurlu
Almu
Kklce
Klkaya
amlgze
atalan
Aslanta
Menzelet
Karkam
Doankent
Krtn
Tortum
zlce

Hydro
Hydro
Hydro
Hydro
Hydro
Hydro
Hydro
Hydro
Hydro
Hydro
Hydro
Hydro
Hydro

Yeilrmak
Yeilrmak
Yeilrmak
Yeilrmak Kelkit
Yeilrmak Kelkit
Seyhan
Ceyhan
Ceyhan
Frat
Harit ay
Harit ay
Tortum Gl
Peri Suyu

29
45
23
21
11
14
27
19
12
40
8
51
12

69
27
90
120
32
169
138
124
189
75
85
26
170

434
117
480
488
199
497
763
658
461
312
189
128
650

Demirkpr
Adgzel

Gezende

2,050

1,017

838

620

356

Total
GWh

(GWh)

630
630
420
69
62
48
32
159
703
56
128
76
54

Karacaren-1

Total
MW

2010
Generation

18
29
25
51
15
53
21
17
24
20
51
44
22

Kemer

Installed
Capacity

Milas, Mula
Yataan, Mula
Milas, Mula
Gediz
Byk Menderes
Byk Menderes
Aksu
Gksu, Ermenek
Kzlrmak
Kzlrmak
Kzlrmak
Kzlrmak
Kzlrmak

Yeniky

Age

Lignite
Lignite
Lignite
Hydro
Hydro
Hydro
Hydro
Hydro
Hydro
Hydro
Hydro
Hydro
Hydro

Yataan

Location / River

(MW)
Kemerky

Fuel Type

2,720
2,599
1,308
138
129
122
149
53
1,372
300
274
171
150

7,218

2,267

3,380

2,379

1,279

Total: 859

Investment Support and

Promotion Agency of Turkey

Lignite - Overview
Turkeys lignite reserves amount to 11.5 billion tonnes 6% of worlds lignite reserves
86% of lignite reserves are operated by public sector

Proven Lignite Reserves by Operating Entity as of 2009 (million tonnes)

Private
sector;
1,077; 11%

EA;
4,718; 48%

MTA;
1,803; 18%
TK; 2,239;
23%

EUAS: Elektrik retim A - State Electricity Generation Company

TKI: Trkiye Kmr letmeleri - Turkish Coal Enterprises
MTA: Maden Tetkik Arama State Mineral Research and Exploration Directorate General

Investment Support and

Promotion Agency of Turkey

Lignite - TKI Reserves and Power Plant Tenders

Pursuant to a Royalty Agreement, private company will build a power plant in exchange for
getting permission to use the lignite reserve that is owned by TKI. Tenders are done based
on a royalty fee (kr/kWh) for the generated electricity.

Location

Reserve
(tonnes)

Cal. Value
(Kcal/kg)

Plant Min.
Cap. (MW)

Tender Date

Tufanbeyli, ADANA

323 million

1300-1400

600

May 2012 Teo Group

Soma-Deni, MANSA

150 million

1250-1400

450

Aug 2012 - Kolin

Kele-Davutlar, BURSA

55 million

2100-2200

270

Nov 2012 - elikler

Tunbilek, KTAHYA

117 million

2200-2650

450

Feb/Mar 2013

Yeniky, MULA

50-60 million 2400

420 (2x210)

May 2013 (expected)

an, ANAKKALE

45 million

2650

210

2013 (expected)

1800

640 (2x320)

TBD

8300

1500

TBD

Soma, MANSA
Soma, MANSA

1.6 billion
m3 SNG

Total

1 billion

Investment Support and

Promotion Agency of Turkey

4,540 MW

(expected)

Lignite Newly Found Reserves

Reserve: 0,5 billion tonnes

Potential (30 yrs): 1.875 MW
TRAKYA

Reserve: 1,8 billion tonnes

Potential (30 yrs): 5.000 MW
2 MOUs signed
KONYA KARAPINAR

Investment Support and

Promotion Agency of Turkey

Reserve: 0,5 billion tonnes

Potential (30 yrs): 1.250 MW
3 MOUs signed
KAHRAMANMARAS
ELBISTAN

Oil & Natural Gas - Turkey as an Energy Corridor and Terminal

Turkey is located in close proximity to 71.8% of worlds proven gas and 72.7% of oil reserves

Investment Support and

Promotion Agency of Turkey

Oil & Natural Gas Existing Natural Gas Supply Contracts

Turkeys Existing Natural Gas Supply Contracts

Countries

Volume
Date of
(bcm/yr) Signature

Duration
(yrs)
Status

Russian Fed. (West)

14 Feb 1986

25

In operation

Algeria (LNG)

14 Apr 1988

20

In operation

Nigeria (LNG)

1,2

9 Nov 1995

22

In operation

Iran

10

8 Aug 1996

25

In operation

Russian Fed. (Black Sea)

16

15 Dec 1997

25

In operation

Russian Fed. (Blue Stream) 8

18 Feb 1998

23

In operation

Turkmenistan

16

12 May 1999

30

Azerbaijan

6,6

12 Mar 2001

15

In operation

(extended)

Projections of Total Demand for Natural Gas

Demand (billion m3)
80
60
40
20
0

2008

45

2009

Source: BOTA

Investment Support and

Promotion Agency of Turkey

2010

58

2015

67

71

76

2020

2025

2030

Oil & Natural Gas - Diversification of Gas Supply Resources

TANAP is $7 billion natural gas pipeline project that will transport gas from Shah Deniz II.

Planned capacity of the pipeline is 16 billion m3 gas in 2020 (6 billion to Turkey), 23 billion in
2023 and 31 billion in 2026.
TANAP (Trans Anatolian Gas Pipeline) - from Azerbaijan through Turkey to Europe

Investment Support and

Promotion Agency of Turkey

Renewables Incentives
FIT scheme
Differentiated FIT scheme based on RER type (Table I)
Extra premiums for domestic components (Table II)
Connection priorities
Lower license fees:
Only 1% of licensing fee
Exemption to pay annual license fee for 8 years in operation
License exemptions in exceptional circumstances, and
Various practical conveniences in project preparation and land
acquisition.

Investment Support and

Promotion Agency of Turkey

Renewables FIT Scheme

25.0

UScent/kWh

20.0

15.0

0.6
1.3

DC #7
DC #6
DC #5
DC #4
DC #3
DC #2
DC #1
FIT

0.5
0.6

2.4

3.5

1.3
0.6
0.6

0.6
0.4
0.8

1.3
0.8

2.4

13.3

13.3

13.3

Biomass

PV

CSP

0.4
0.5
0.9
2.0

0.7
0.7
1.3
10.0

1.0
1.3

1.3
0.6
1.0
0.8

10.5

5.0

7.3

7.3

Hydro

Wind

0.0

Investment Support and

Promotion Agency of Turkey

Geothermal

Renewables Local Content Example for Wind

PART (aksam)

ADDITIONAL FIT FOR THE

PARTS

COMPONENT (aksam
oluturan paralar)

RATIO OF DOMESTIC PARTS

ADDITIONAL FIT FOR THE

COMPONENTS

Blade

0.8 USDc/kWh

100%

0.8*100% = 0.8 USDc/kWh

Generator and power

electronics

1.0 USDc/kWh

Blade and rotor hub

fittings
Generator

55%

1.0*55% = 0.55 USDc/kWh

Power Electronics

45%

1.0*45% = 0.45 USDc/kWh

Firma hangi durumlarda Additional FITten faydalanabilir?

Firmann additional FITten faydalanabilmesi iin aksamn %55inin Trkiyede retilmi olmas gerekiyor. Aksamn
%55ini bulmak iin aksam oluturan paralara bakyoruz. Trkiyede retilen paralarn oranlar toplam %55e
ulayor ya da ondan fazlaysa o aksam Trkiyede retilmi saylyor.
rnek 1: Firma sadece jeneratr Trkiyeden alyor. Jeneratr parasnn oran %55 olduu iin, firma jeneratr ve
g elektronii aksamna verilen 1.0 USDc/kWh FITten yararlanabilir. Yararlanma miktar ise 1.0*55% = 0.55
USDc/kWh olacaktr.
rnek 2: Firma jeneratr Trkiyeden almyor, sadece g elektroniini Trkiyeden alyor. G elektronii
parasnn oran %45 olduu iin, firma jeneratr ve g elektronii aksamna verilen 1.0 USDc/kWh FITten
yararlanamaz.
rnek 3: Firma jeneratr ve g elektronii paralarn Trkiyeden alyor. Jeneratr ve g elektronii paralarnn
oran %55+%45 = %100 olduu iin, firma jeneratr ve g elektronii aksamna verilen 1.0 USDc/kWh FITten
yararlanabilir. Yararlanma miktar ise (1.0*55%) + (1.0*45%) = 0.55 + 0.45 = 1.0 USDc/kWh olacaktr.
rnek 4: Kanad oluturan tek bir para tanmlanm: Kanat ve rotor gbei balant elemanlar. Bu para Trkiyede
retilirse aksam Trkiyede retilmi saylyor. Dolaysyla kanat Trkiyede retilirse firma 0.8*100% = 0.8
USDc/kWh kadar additional FITten yararlanabilir.
Investment Support and
Promotion Agency of Turkey

Renewables Investment Opportunities and Timeline

Resource

Targets and Timeline

Hydro

40 GW potential; about 18 GW operational, 20 GW is expected to be

developed by IPPs by 2023

Wind

48 GW potential; 2 GW operational, about 11 GW licensed; new license

applications expected to start from 2013

Solar

380 billion kWh/y potential; 3 GW target; License applications for 600

MW in June 2013

Biomass

8.6 MTOE; 15.6 MW operational.

Geothermal

600 MW target; 94.2 MW operational and another 127.5 MW under

construction.

Investment Support and

Promotion Agency of Turkey